Posts Tagged ‘Leslie Crutchfield’

“Philanthropy is neither a solitary effort by the donor nor even a dialectical effort between the donor and the grantee. Social change involves many different players from all sectors of society. It is through the engagement and alignment of these multiple players that catalytic donors achieve their impact.”

A best practice worth repeating

I recently taught a philanthropy class where we discussed the merits of this sentiment published in Crutchfield, Kania and Kramer’s book, Do More Than Give: The Six Practices of Donors Who Change the World. While this book has been widely discussed since it was published in 2011, revisiting it with my class reminded me that the principles are as relevant today as they were four years ago. I have a renewed appreciation for some of the case stories that illustrate what it means to be a catalytic donor so I’d like to return to one of the authors’ great profiles about a donor by the name of Emily Jackson Tow.

Jackson Tow is an example of what the authors call an adaptive leader or someone who fully evaluates the issue and hand and determines how she can facilitate transformative change beyond funding. These adaptive donors “are not content to merely give a man a fish, or even teach him to fish; these entrepreneurs won’t stop until they’ve revolutionized the entire fishing industry,” says Ashoka founder Bill Drayton. In this particular case, Jackson Tow demonstrates the first of the six highlighted best practices in the book: advocate for change.

How Emily Jackson Tow advocated for change

The authors highlight the Tow Foundation’s advocacy efforts to demonstrate the power of a donor’s influence beyond financial impact. The Tow Foundation maintains a portfolio approach to giving, but its greatest impact comes from its nonfinancial contributions, such as sweat equity, knowledge of best practices, national and local networks, relationships and perseverance to reform the state’s juvenile justice system.

Emily Tow Jackson became aware of a class action lawsuit filed on behalf of adolescents who were jailed for minor offenses, such as graffiti, in the same facility as serious offenders and confined to small, poorly ventilated cells for up to 21-hour stretches with two inmates and no toilet. Beyond the horrible conditions, the larger issue was Connecticut’s escalating youth imprisonment rates. Many of the juvenile offenders did not require high-security prison facilities; rather they needed counseling, safe and stable homes, and other basics.

Tow Jackson immediately set to work by enlisting three nonprofit organizations to establish the Connecticut Juvenile Justice Alliance with a start-up grant of $25,000. Additionally, the foundation engaged in advocacy activities that included the following:

– funding and participating in collaborations,

– educating legislators with forums at the state capitol,

– participating on local and state government committees,

– raising public awareness through media,

– and giving general operating support to nonprofits focused on this issue.

By 2009, referrals to juvenile court dropped by more than one third and the number of youth convictions dropped by almost two thirds. At the time the Do More Than Give was published, Connecticut was recognized nationally as an innovative leader in handling juvenile cases, rather than as a leading incarcerator of minors.

Nuances of advocacy

The authors explain an important piece about this best practice: Some funders avoid lobbying because of a fear or misunderstanding of how much lobbying is allowed, so the authors define advocacy and related terms as:

– Advocacy refers to activism around an issue such as climate change, free trade or youth justice. Examples of activities range from educating and mobilizing voters to pitching media stories and raising awareness to directly influencing public officials.

– Policy advocacy (a.k.a. lobbying) refers to specific efforts to change public policy or obtain government funding for a social program.

– Lobbying versus advocacy: Most of the confusion lies with advocacy. Lobbying is prohibited by foundations in the U.S. and advocacy is an all-encompassing term for a whole range of activities.

Private foundations, which include most family foundations, cannot fund or engage in direct lobbying, but they can make general operating grants to nonprofits that lobby. Large private foundations have a long political history because they generally have a larger staff of trained professionals who have a deep understanding of the issues and social sector.

Conversely, public foundations, such as community foundations are allowed both to engage in lobbying themselves and to fund nonprofits that lobby. Because community foundations find themselves at the center of many different stakeholders, most shy away from lobbying. However, the authors explore a case study about The New Hampshire Charitable Foundation and how it successfully positioned its lobbying activities so its constituents would embrace them.

– Corporate foundation lobbying: Good corporate foundations reconcile lobbying activities that benefit their company with those that lend strength to the social causes they support for a win-win. Corporations can leverage vast brand recognition and marketing channels to broadcast policy messages and they can mobilize entire industries. In contrast, some companies still support legislation that directly contradicts their socially responsible images. For example, Toyota, maker of the eco-friendly Prius, lobbied with other carmakers against tougher fuel economy standards.

Working together for maximum impact

To create systemic change, nonprofits today need catalytic donors in their court to leverage the full participation of every sector in society. According to the authors, the number of billionaires has tripled since 2000 and nearly half of the 75,000 private foundations established in the U.S. were created in the last decade. We’re also seeing growth in private enterprise where new corporate entities are created to blend profit with social purpose, as well as in government’s willingness to partner in nonconventional ways.

Within the context of these societal trends, there is no question that donors are positioned like never before to help orchestrate an integrated approach to problems and embrace catalytic philanthropy. Visit the Do More Than Givewebsite for more stories about donors who create catalytic change in their communities.

The world has changed significantly since the first edition of Forces for Good: The Six Practices of High-Impact Nonprofits was published in late 2007. The U.S. and global economies have significantly slowed down, while government cutbacks, reduced public philanthropy and less corporate funding have all challenged nonprofits like never before.

This stark new context prompted us to revisit our initial research last year and see if our findings still held up in a dramatically different environment. In the original book, we studied 12 high-impact nonprofits, from Habitat for Humanity to Heritage Foundation to Feeding America, and distilled six practices these organizations use to change the world. This time, we wanted to know how the original high-impact nonprofits fared during the Great Recession and what else we might we learn from them about thriving in difficult times.

Additionally, we also wanted to know how local and smaller nonprofits, which represent the vast majority of our sector, apply the same six practices to deepen their local impact. So we also conducted entirely new research last year on 13 local and smaller nonprofits operating on budgets ranging from $600,000 to $5 million. Despite recent changes in the economic landscape, our updated research reaffirms the viability of the original six practices for scaling social impact for organizations both large and small.

Here are a few lessons we learned from the original 12 high-impact nonprofits about thriving in turbulent times.

Accelerate into a downturn

Counter-intuitively, instead of causing setbacks, the recession became a force that propelled high-performing groups forward. Rather than putting their foot on the fundraising brake, many accelerated their development efforts, often by focusing their strategy on their highest-impact activities. Along the way, the majority of the original 12 nonprofits significantly increased their revenue. Teach For America quintupled in size, growing from $41 million in 2005 to $277 million in 2010. Four of the 12 groups doubled their budgets, and almost all the others grew at healthy clips. Rather than shying from growth, they leaned into their strategies and came out stronger.

Stay close to your donors

The moment the recession hit, Ed Feulner, CEO of The Heritage Foundation, instructed his development team to call every single major benefactor and ask: “How are you doing? How will this downturn affect your giving?” Donors appreciated Heritage’s high-touch approach, cementing their long-term commitment to the conservative cause. Then Heritage intensified its direct marketing campaign. “Those who do well in recessions come out strong. We didn’t want to show weakness,” says Feulner. The result? From 2005 to 2010, the organization doubled in size to $81 million, and nearly tripled its dues-paying membership base from 250,000 to more than 700,000 members.

Find opportunity in crisis

Fred Krupp, chief executive of the Environmental Defense Fund made the point: “Don’t let a good crisis go to waste.” It’s advice many of the nonprofits we studied have taken to heart. For EDF it was leveraging the Gulf of Mexico oil spill in 2009 to help spearhead the “biggest ecosystem restoration effort ever in the history of the planet,” says Mr. Krupp. For other nonprofits, it was about pivoting quickly to respond to immediate needs. “Of course we all pray that there will be no disasters,” says Habitat for Humanity’s chief executive, Jonathan Reckford. “But when they do occur, you have to be willing to adjust your efforts… [Hurricanes] Katrina and Rita, and the Indian Ocean Tsunami, were rallying points to kill cultural sacred cows about how we scale. With both events, we went much deeper in a smaller place and time.” Habitat built 25,000 homes in response to the tsunami and 2,000 in the Gulf region post-Katrina.

In addition to employing these immediate strategies to survive and thrive during the recession, these high-impact nonprofits all continue to follow the six practices we first identified. If anything, they’ve even deepened their reliance on these practices to increase their impact. They know how to tap into business to create new ways to serve the public good and how to influence government policies to help the people they serve. And they are constantly building movements of volunteers and supporters while working collaboratively with their nonprofit peers. Lastly, they continue to share leadership and remain highly adaptive, able to not just survive, but thrive in challenging times. In our updated book, we show how these organizations have continued to leverage the six practices to be forces for good, even in difficult times.

As for local organizations, we also learned a number of lessons about how smaller nonprofits can apply the same six practices to have deeper impact in their communities. In a lengthy chapter, featuring all new research on 13 high-impact local nonprofits, we explore how they adapt and modify these practices to fit the local context. Many of them share leadership not just within their organizations, but with their volunteers, board and other close stakeholders, thus expanding their reach. They also engage local evangelists to help deliver services and promote their cause, and they build networks of local nonprofits, collaborating to share resources, align action and be more effective in their work. Lastly, while advocacy and making markets work are more challenging for smaller, local nonprofits, that didn’t stop the best of them from using these levers to change policy at the state and local level or to make local markets work more effectively by working with and through business.

About the authors

Leslie Crutchfield and Heather McLeod Grant co-authored Forces for Good: The Six Practices of High-Impact Nonprofits; the new updated edition (Jossey-Bass/Wiley 2012), includes lessons on how 12 high-impact nonprofits fared during the global recession and additional research on how local and smaller nonprofits employ the six practices to deepen impact in their own communities.

Start at the beginning. One of the six best practices we spent some time discussing with Grant was first on the list of high-impact nonprofits: bridging the gap between service and advocacy. Several EDs in the group commiserated with one another about how this was a neglected area which needed improvement.

Systemic change requires more. In Forces for Good, Crutchfield and Grant explain that great nonprofits realize that, in order to achieve higher levels of impact, they need to bridge the gap between advocacy and service. They may start out providing great programs, but eventually realize that they cannot make systemic change without also engaging in advocacy. Others start out doing advocacy and then add programs to catalyze their strategy.

Bridge the divide. Providing services helps meet immediate needs, such as feeding the hungry or housing the poor; advocacy helps reform larger systems by changing public behavior or creating governmental solutions. High-impact nonprofits bridge the divide between advocacy and service. Although policy advocacy can be an incredibly powerful tool for creating large-scale social change, many nonprofits shy away from it.

Create a virtuous cycle. Some of the reasons for their hesitation include the fact that advocacy is difficult to manage and requires different organizational skills than those needed to provide direct services. In addition, it is challenging to measure results of advocacy efforts. However, the authors discovered that simultaneously doing both creates a virtuous cycle. Instead of causing the organization to lose focus or lessening its impact, engaging in both service and advocacy can create an impact that is greater than the sum of its parts. It is no surprise, then, that all the organizations in the book have engaged in both.

Here are three ways to bridge the divide:

1. Start with service, add advocacy. The majority of organizations in the book began with direct service, or programs, and adopted policy advocacy well after they were founded. The underlying reason why they decided to engage in advocacy was the same: They wanted to have more impact on the problems they were trying to solve.

2. Start with advocacy, add service or programs. Starting out with policy advocacy is especially effective when an organization is relatively small in relation to the level of impact it seeks to achieve.

3. Combine service and advocacy from the outset. The authors observed two main patterns among the organizations that combined both from the beginning: a) Leaders knew that replicating programs site by site, with private funding, would never take them to the level of change they were seeking; and b) Leaders also shared a common philosophical belief that government should be a part of the solution. Policy reform sends a signal to the rest of the nation that the changes these organizations propose are important enough for society as a whole to adopt.

Watch for part four of our advocacy series when we highlight how high impact nonprofits are successfully combining approaches of service and advocacy.

You love pizza. Why not be purposeful about it? A new company called Naked Pizza agrees. Naked Pizza’s mission is to demonstrate, by example, that fast food can be part of the solution in the global epidemic of obesity and chronic illness by, 1) proving that an unhealthy and popular fast food can be made healthier and tasty, and, 2) making a business case for investment, profit and scale. Naked Pizza’s corporate social responsibility strategy is textbook, or in this case, business book—Do More Than Give: The Six Practices of Donors Who Change the World to be exact. Naked Pizza now shares company with GE and other large companies that are opening up new business markets by blending social good with the bottom line.

According to Do More authors, Crutchfield, Kania and Kramer, one of the six best practices of highly effective donors is to blend profit with purpose. Businesses have a lot to offer as vehicles for social progress, and donors can engage business tools in three ways:

1) They can tap corporate know-how to create direct social impact: They can utilize the knowledge, skills and abilities of employees, as well as company systems and processes; intellectual property such as patents and trade secrets; and other assets. For example, GE used their industry know-how to upgrade thirty-seven clinics and hospitals and retrained local staffs in poor communities in Africa, Asia and Latin America, all without charge. GE continues to open a new clinic every month as part of its $90 million annual budget for philanthropy.

2) They can create shared values through profit-making initiatives that serve social objectives: In the GE example, senior executives saw a tremendous range of opportunities for their business. The company invested $6 billion to develop new, inexpensive products and treatments that meet the health needs of low-income populations around the world with a goal of reaching 100 million new patients every year. GE partners with Grameen Bank, the microfinance institution, to build a sustainable rural health model, reducing maternal and infancy mortality rates by 20 percent.

3) They can use their investment capital to further their social impact: The authors report that catalytic donors are using their vote and their cash to further social issues through “impact investments.” The authors explain a strategy called “shareholder advocacy,” where a foundation can purchase shares of stock in a company in which they wish to have policy influence. For example, the Nathan Cummings Foundation, whose interest in the environment prompted them to purchase stock in Smithfield Foods so they could file a shareholder resolution requesting complete disclosures of environmental impacts. They filed annually, eventually gaining 29 percent of the shareholders’ votes, and the company began to negotiate with the foundation. The foundation brought in their grantees for expertise, which led to the company’s commitment to track and report environmental indicators relating to its farms.

Even more immediate social impact can be accomplished by foundations offering low- or no-interest loans to grantees, which has been done for decades. These loans qualify as program related investments, which means foundations can count these loans as part of their payout requirements. This strategy allows foundations to “recycle” their funds because they can be used multiple times to achieve social impact.

Another example of impact investing is when foundations or donors are willing to be the lead investors in a socially responsible business solution to attract other venture capitalists. Kiva is a great example—in 2010 users lent more than $100 million in microloans. The Packard Foundation similarly was the first investor to the table in their case, taking the risk and lower return in order to fund a sustainability project, which eventually attracted substantial venture capital from traditional sources.

An interesting article was brought to my attention this morning by a tweet from one of our CausePlanet contributors, Michaela Hayes. Published by the Stanford Social Innovation Review and written by Kristi Kimball and Malka Kopell, “Letting Go” highlights a handful of ways that foundations are getting in the way of their grantees’ work. Micromanaging is just one of the ways that foundations undermine the work of their recipients, say Kimball and Kopell, who work within the foundation world.

In fact, the first problem was described as “foundation-designed solutions.” Crutchfield, Kania and Kramer discuss this problem in Do More Than Give. The Do More authors describe number four of their six best practices as “empower the people,” which explains that when foundations or donors sit shoulder to shoulder with recipients and even the communities’ served at the same table, creating social change becomes more collaborative and results-oriented rather than the give, spend and report cycle, we typically see between grantor and grantee. Crutchfield, Kania and Kramer say that catalytic donors view individuals as “essential participants” in the process of solving problems for themselves. Listening to stakeholders is a powerful engine for change because of the ideas that emerge and the solutions that result from brainstorming.

Another problem Kimball and Kopell expose from their view inside the foundation world is that funders typically make grants with “tunnel vision.” They choose one organization to make the change they are looking for in the entire system. “Instead of letting 1,000 flowers bloom, they think they can afford just one variant. But focusing narrowly on one solution is a fragile strategy, particularly in complex, unpredictable environments,” say Kimball and Kopell. Do More authors would agree by sharing best practice number three, which is “forging nonprofit peer networks.” Instead of focusing on a few grantees, donors are in a unique position to look at an issue in its entirety and call for convenings among all nonprofits who focus on the same issue to benefit from information sharing and collective impact.

Do More Than Give is an important read for many reasons. Here are two: 1) This book takes a rare and intelligent look at what the donor can do beyond selecting a good cause and 2) Each of the donor recommendations fuels your imagination to explore how you can cultivate the catalytic behavior in your followers, friends and philanthropists.

Also worthwhile in this book are the case studies of individuals, corporations and foundations—large, small, private and community—who have played a unique role in advancing a larger issue with nonprofits at the table. For those who haven’t read its predecessor, Forces for Good, you can read a summary of best practices in the book’s appendix, which essentially means two books in one. Overall, the book contains a great deal of innovative thought and approaches to working collectively with donors.

This week, I’m highlighting Crutchfield, Kania and Kramer’s best practice #2: blending profit with purpose, thanks to a recent blog post I read today at SelfishGiving.com.

According to the authors, businesses have a lot to offer as vehicles for social progress, and donors can engage business tools in three ways:

1) They can tap corporate know-how to create direct social impact: They can utilize the knowledge, skills and abilities of employees, as well as company systems and processes; intellectual property such as patents and trade secrets; and other assets. For example, GE used their industry know-how to upgrade thirty-seven clinics and hospitals and retrained local staffs in poor communities in Africa, Asia and Latin America, all without charge. GE continues to open a new clinic every month as part of its $90 million annual budget for philanthropy.

2) They can create shared values through profit-making initiatives that serve social objectives: In the GE example, senior executives saw a tremendous range of opportunities for their business. The company with a goal of reaching 100 million new patients every year. GE partners with Grameen Bank, the microfinance institution, to build a sustainable rural health model, reducing maternal and infancy mortality rates by 20 percent.

3) They can use their investment capital to further their social impact: The authors report that catalytic donors are using their vote and their cash to further social issues through “impact investments.” The authors explain a strategy called “shareholder advocacy,” where a foundation can purchase shares of stock in a company in which they wish to have policy influence. For example, the Nathan Cummings Foundation, whose interest in the environment prompted them to purchase stock in Smithfield Foods so they could file a shareholder resolution requesting complete disclosures of environmental impacts. They filed annually, eventually gaining 29 percent of the shareholders’ votes, and the company began to negotiate with the foundation. The foundation brought in their grantees for expertise, which led to the company’s commitment to track and report environmental indicators relating to its farms.

4) Even more immediate social impact can be accomplished by foundations offering low- or no-interest loans to grantees, which has been done for decades. These loans qualify as program related investments, which means foundations can count these loans as part of their payout requirements. This strategy allows foundations to “recycle” their funds because they can be used multiple times to achieve social impact. Another example of impact investing is when foundations or donors are willing to be the lead investors in a socially responsible business solution to attract other venture capitalists. Kiva is a great example—in 2010 users lent more than $100 million in microloans. The Packard Foundation similarly was the first investor to the table in their case, taking the risk and lower return in order to fund a sustainability project, which eventually attracted substantial venture capital from traditional sources.

Working through one sector alone is no longer enough to address the multifaceted social and environmental problems we face today. Because donors can do more than give, they have a critical opportunity to move on from passive donor to problem solver.

To create systemic change, nonprofits today need catalytic donors in their court to leverage the full participation of every sector in society. According to Do More Than Giveauthors Crutchfield, Kania and Kramer, the number of billionaires has tripled since 2000 and nearly half of the 75,000 private foundations established in the U.S. were created in the last decade.

We’re also seeing growth in private enterprise where new corporate entities are created to blend profit with social purpose, as well as in government’s willingness to partner in nonconventional ways. Within the context of these societal trends, there is no question that donors are positioned like never before to help orchestrate an integrated approach to problems and embrace catalytic philanthropy.

These authors have distilled the six practices of donors who change the world for readers. Nonprofit leaders will no doubt discover ways in which they can nurture best behavior in their donors with this book. As we always do in our Page to Practice™ book summaries, we interview the author and Leslie Crutchfield provided some terrific insight. Here’s one of our questions and her answer:

CausePlanet: Within the six best practices of donors who change the world, which did you find to be the least common among your donor profiles and why?

Crutchfield: This is an excellent question and one I haven’t been asked before. When speaking about Do More than Give or my previous book with Heather McLeod Grant, Forces for Good, I’m often asked which is the most important practice to focus on if you’re not doing all of them. But which one is least common? I think we’re starting to see a shift on a many of these. Practice #1: Advocate for Change is an interesting theme, because so many foundation boards shy away from funding advocacy. In my view, this is mostly because there is simply too much confusion about what is legal versus what is not–I always tell boards and trustees that each of the nonprofits in my first book, Forces for Good, were able to do all the lobbying they needed and still fall well within the legal limits–to see a shift toward advocacy. But it seems today more donors are warming up to the new idea. Practice #2: Blend Profit With Purpose is where we address activities such as mission investing. But a very small percentage of foundations actually put into practice that approach, despite the excellent report on the subject by Rockefeller Philanthropy Advisor: “Philanthropy’s Passing Gear.”

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Last week we had a terrific article, “Language Matters,” presented by Marco Montenegro, Senior Associate of La Piana Consulting, who discussed the notion of language usage and how it’s become imperative to check your definitions at the door when working with vastly different constituents in the community. Be they funders, recipients, stakeholders or bystanders, individuals and organizations must respect perspective when collaborating with one another.

Montenegro says, “As the gap between rich and poor widens and the ability to connect in an ever shrinking world increases, today’s nonprofit leaders need to be the conscience for our varied definitions for the social issues we are working to improve. How would someone raised in the U.S. define educated and unemployed or government corruption in contrast to a recently arrived Egyptian immigrant? How would a woman from the U.S. define women’s rights in contrast to a woman from Afghanistan or Saudi Arabia?

I couldn’t help but think about Montenegro’s article in light of our upcoming Page to Practice feature, Do More Than Give: The Six Practices of Donors Who Change the World by Leslie Crutchfield, John Kania, and Mark Kramer. In Do More, “Practice 4: Empower the People” refers to the fact that systemwide change cannot be attributed to a single organization or donor. In reality, it is the “collective action” of many individuals and entities that create transformative change.

Donors who want to catalyze change must acknowledge that our collective communities don’t view philanthropy in the same way. For example, the authors explain that what a white American might call philanthropy, a black American might call self-help. A Latina might say the most important service she provides is filling out her Census form so her people can be counted. The reason this discussion is so important is that donors who want to make the biggest change in their communities or globally must empower and mobilize people at the individual level. The people most affected by a problem aren’t always closely affiliated with the organizations that support their issue.

According to the authors, specifically engaging and empowering individuals helps funders and collaborators to: